Prices of HDB resale flats drop to 2-year low
THE Housing Board resale market continued to cool last month, with prices hitting a two-year low and fewer flats changing hands.
It was the fourth consecutive month of price drops, according to flash figures from the Singapore Real Estate Exchange (SRX).
Transactions had picked up in March and April, but could have been due to pent-up demand following the usually quiet festive season, with last month's fall seeing the market come "back to reality", said R'ST Research director Ong Kah Seng.
The HDB's combined launch of new and balance flats last month could also have diverted demand, said experts.
Resale prices fell 1.2 per cent from April to last month, reaching the lowest level since April 2012, according to SRX's price index.
The main reason for the fall remains the same, said analysts - the continued effects of loan curbs introduced in August.
The decline was across all HDB flat types, with executive flat prices falling the most, at 2.8 per cent. Three- and four-room flat prices dipped 0.8 per cent, while prices of five-room units fell 0.6 per cent.
Overall, prices have fallen 6.5 per cent since their peak in April last year, and 2.7 per cent since the start of this year.
According to SRX's median Transaction Over X-Value measure, the amount that buyers are underpaying for their flats remained stable at $4,000 below SRX's estimated market value.
Yet, buyers continue to hold back. Last month, 1,320 flats changed hands, down 11.1 per cent from the 1,484 deals in April. This was also 19.4 per cent fewer than a year ago.
One reason could be the 3,383 units in the sale of balance flats (SBF) exercise, with lower prices than resale flats', said OrangeTee head of research Christine Li.
For Mr H. H. Pang, 56, cool buyer sentiment is a worrying reality.
The freelance computer repairman is trying to sell his four-room flat in Ubi, so that he can move to Bedok to be closer to his daughter and mother.
"I am worried that I won't be able to dispose of this flat because buyers are waiting for prices to go down," he said.
With the weak resale market, those upgrading to private property may choose to rent them out instead, said Ms Li. This supply increase could keep a lid on rentals, she added.